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How Nigeria generated an all time high tax revenue in 2018

Last year, the FIRS collected some N5.320 trillion worth of tax revenue, according to a disclosure made by the agency’s Chairman, Mr Babatunde Fowler.

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Mr Tunde Fowler Chairman, Federal inland Revenue Service (FIRS), Tax

Nigeria’s Federal Inland Revenue Service, FIRS, last year collected some N5.320 trillion worth of tax revenue, according to a disclosure made by the agency’s Chairman, Mr Babatunde Fowler.

Mr Fowler made this disclosure yesterday in Lagos during a FIRS stakeholders’ retreat. According to him, the agency had actually generated the total sum of N5 trillion by the middle of December last year, with the hopes of rounding off the accounts for the year 2018 at N5.3 trillion.

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If this happens, which is most likely, it would be the highest amount ever generated by the tax agency during a single year period since it was created. The closest amount to this would be the 2012 record of N5.07 trillion.

Mr Fowler also attributed various reforms and new efficient models in the tax collection process as the reason for the recorded results.

Meanwhile, comparing last year’s performance with 2017, Mr Fowler noted that it was a difference of N1.292 trillion.

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“In actual figures, in 2016, we collected N3.3 trillion, 2017 was N4.027 trillion and in 2018, we realised N5.320 trillion. We are also quite aware that our focus has to be on non-oil revenue. And in the past three years, when you look at the percentages in terms of contribution of oil tax revenue, in 2015 non-oil contribution to tax revenue accounted for 65 per cent, in 2017 it was 62.5 per cent and in 2018 it was 53.62 per cent.

“So, certainly, our non-oil tax revenue is growing in absolute figures, from 2016 to 2018. In 2016 it was N2.149 trillion, in 2017 it was N2.5 trillion and in 2018 N2.85 trillion. That does not mean we have left behind the oil tax revenue; it has improved from N1.5 trillion in 2016 to N1.52 trillion to N2. 467 trillion in 2018.”

In the meantime, the Federal Government has set a target of N8 trillion for the New Year, Mr Fowler disclosed. Part of the money generated by the agency in 2019 would be used to fund the budget.

Recall that the Federal Government had introduced the Voluntary Assets Income Declaration Scheme (VAIDS) with the aim of encouraging Nigerians to voluntarily declare their income/assets as well as pay taxes accordingly. Interestingly, the scheme achieved the set objective.

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Emmanuel covers the financial services sector for Nairametrics. Do you have a scoop for him? Well then, contact him via his email- [email protected]

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Financial Services

FBN Holdings announces N25 billion capital injection into FirstBank

The fresh equity capital injection is coming on the heels of FBN Holdings’ recent divestment from FBN Insurance.

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FBN holdings plc, First Bank

N25 billion worth of equity capital has been injected into First Bank of Nigeria Limited by its parent company, FBN Holdings Plc. The move is coming on the heels of FBN Holdings’ recent divestment from FBN Insurance Ltd.

A statement signed by FBN Holdings’ Company Secretary, Seye Kosoko, as seen on the Nigerian Stock Exchange’s website, noted that the N25 billion is part of the net proceeds from the recent divestment from  FBN Insurance Limited.

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READ MORE: Nigeria’s tier-1 banks earn N18.4 billion from account maintenance charges in Q1 2020

Following this N25 billion capital injection, First Bank of Nigeria Limited’s Capital Adequacy Ratio (CAR) has increased to 16.53%. This is before capitalising year to date profit for half-year 2020.

More details: While commenting on this development, FBN Holdings’ Chief Financial Officer, Oyewale Ariyibi, said that the “divestment has unlocked significant value embedded in the former subsidiary which is being leveraged to strengthen the core baning business for which the Group is renowned.”

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The company also explained that the overriding objective of these recent moves is to “optimise capital across the Group to drive business growth, enhance efficiency, and improve overall shareholders’ value.”

READ MORE: More banks, insurance firms declare closed periods ahead of H1 results release

The backstory: Back in April this year, FBN Holdings Plc first disclosed ongoing talks with Sanlam Emerging Markets (Proprietary) Ltd over a possible sell-off of its 65% stake in FBN Insurance to the South African firm. Fast-forward to early June, FBN Holdings again informed stakeholders that it had completed the divestment process. All the while, no mention was made about the value of the transaction until now.

Note that FBN Holdings Plc reported a profit after tax of N49.5 billion for the half-year period ended June 30th, 2020. This represents a 56.3% increase when compared with N31.6 billion reported in H1 2019. The company’s Chief Executive Officer, UK Eke, recently commented on performance, noting that “the H1 2020 financial results are impressive and reconfirm our consistent focus on enhanced shareholder value.”

READ MORE: Here’s how much banks spent on advertising & marketing in Q1 2020

FBN Holdings’ share price on the Nigerian Stock Exchange is currently trading at N5.05. The company has a market capitalisation of about N181.3 billion, according to information gleaned from Bloomberg.

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Hospitality & Travel

UAE denies placing travel ban on Nigerians, gives reason for suspending visa issuance

The travel between Nigeria and UAE remained limited due to the closure of the Nigerian airspace.

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UAE denies placing travel ban on Nigerians, gives reason for suspending visa issuance

The United Arab Emirates (UAE) Embassy in Nigeria has reacted to media reports about the purported travel restrictions imposed on Nigerians wishing to travel to the UAE.

In its response, the UAE Embassy in Abuja refuted the accuracy of the information which was contained in those reports, while also affirming the growing bilateral relations between the 2 friendly countries.

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This disclosure was made in an official statement by the United Arab Emirates Embassy in Abuja on Thursday, August 6, 2020.

The embassy, in its statement, said the UAE government acknowledged that travel between Nigeria and the UAE has been limited due to the closure of the Nigerian airspace. Part of the statement said:

In response to recent press and social media reports regarding purported travel restrictions between the UAE and Nigeria, and in an affirmation of the growing bilateral relations between the two friendly countries, the UAE Embassy in Abuja denies the accuracy of the information contained in these reports.

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“At the onset of the COVlD-19 pandemic, the UAE took a number of precautionary measures to combat the virus’ spread, including the temporary suspension on issuing UAE visas for all nationalities as of March 17, 2020.

“After entering the recovery phase of the pandemic, the UAE eased some measures on July 7, permitting visitors from various countries to adhere to the necessary precautionary measures, including by showing negative PCR test results within 92 hours of travelling to the UAE. This includes those visiting from Nigeria.”

(READ MORE:FG travel restrictions on 13 countries: A little too late?)

The statement also noted that the UAE Embassy and the Nigerian Government will continue to work closely to obtain the necessary approvals to facilitate travel between both countries.

It can be recalled that there were media reports which were triggered by claims of a travel agency, saying that visa renewals for Nigerians in the UAE, approval for permanent residents, and tourist visas have been discontinued.

Some social media users, in reaction to the development, linked the new restrictions to some of the fraud cases involving some Nigerians in Dubai recently

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Hospitality & Travel

FG commences process of resumption of international flight operations in weeks

The government has expressed its readiness to reopen the nation’s airspace in a matter of weeks.

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FG commences process of resumption of international flight operations in weeks, COVID-19: Reactions trail FG travel ban on 13 countries

The Federal Government has commenced the process of gradual resumption of international flight operations which were suspended as part of measures to contain the spread of the COVID-19.

Airport authorities have expressed their readiness to reopen the nation’s airspace in a matter of weeks rather than months.

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During a briefing on Thursday, the National Coordinator of the Presidential Task Force (PTF) on COVID-19, Sani Aliyu, said that approvals have been given for aviation authorities to commence the process for the resumption of international flight operations.

READ MORE: Chinese Loans: Clauses are international standard terms – Amaechi

Aliyu revealed that the Nigerian Civil Aviation Authority (NCAA), other aviation agencies and the airlines, are to come up with a safe process through which airlines operating international flights can resume operations.

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The PTF National Coordinator further disclosed:

For international travel, we have made recommendations to the aviation industry to commence the process for reopening international airports, provided all existing international and local COVID-19 protocols are in place.

“We have modified the protocol for passenger arrivals at the airports. Domestic passengers arriving at the airports are advised to arrive one hour before their flights and three hours before international flights when this restarts.”

READ MORE: COVID-19: WHO says there is no ‘zero risk’ for countries easing travel restrictions

He said passengers arriving for domestic flights can now arrive an hour and a half before departure, while international flight passengers are to arrive 3 hours before departure.

In his statement earlier, the Chairman of the Presidential Task Force (PTF) on COVID-19, who also doubles as the Secretary to Government of the Federation, Boss Mustapha, had disclosed that the major changes being proposed in the eased lockdown were aimed at achieving gradual reopening of international flight operations within parameters.

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It also includes reopening of rail transportation within established parameters and the granting of permissions to exit classes to resume ahead of examinations.

READ ALSO: UN’s COVID-19 basket fund donates N26 billion worth of medical supplies to FG

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In his own contribution, the Minister for Aviation, Hadi Sirika, said that the decision to resume flight operations was not purely an aviation problem, as it had to do with health.

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He revealed that the PTF had set up a technical committee that would deliberate on the date that all the stakeholders in international air transport would be happy to start operations.

While sharing in the pain of Nigerians, Hadi Sirika admitted that the closure of the international air space had separated families and friends, denied people access to hospitals and schools abroad as well as denied them access to their businesses.

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READ MORE: Okonjo-Iweala gets Organised private sector’s endorsement for WTO job

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